By: Williams S.B. No. 350
A BILL TO BE ENTITLED
AN ACT
relating to the restructuring of fund obligations and accounts of
the Texas Municipal Retirement System and related actuarial and
accounting procedures.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 851.001, Government Code, is amended by
amending Subdivisions (1) and (16) and adding Subdivision (20) to
read as follows:
(1) "Accumulated contributions" means the sum of all
contributions made by a member and credited to the member's
individual account [in the employees saving fund], plus interest
allowed on the account as provided by this subtitle.
(16) "Member" means a person for whom an individual
account has been established in the retirement system [employees
saving fund] and whose membership has not terminated under Section
852.104.
(20) "Individual account" means an individual account
for a member in the benefit accumulation fund, as established under
Section 855.306(a).
SECTION 2. Subsection (a), Section 852.103, Government
Code, is amended to read as follows:
(a) A living person who is not an employee of a
participating department and who has not retired may, after
application, withdraw all of the accumulated contributions
credited to the person's individual account [in the employees
saving fund], and the retirement system shall close the account.
SECTION 3. Subsection (b), Section 852.105, Government
Code, is amended to read as follows:
(b) A governing body may not adopt an ordinance under this
section unless the actuary first determines, on the basis of
mortality and other tables adopted by the board of trustees, that
all obligations of the municipality to the benefit [municipality]
accumulation fund, including obligations proposed under the
ordinance, can be funded by the municipality within its maximum
contribution rate and within its amortization period.
SECTION 4. Subsection (d), Section 852.108, Government
Code, is amended to read as follows:
(d) Member contributions under Section 855.402 shall be
made on all compensation paid to the employee by the reemploying
municipality at the same rate as is required of other employees of
the department. The retirement system shall credit [deposit] the
contributions on receipt to the member's [in an] individual account
[for the member in the employees saving fund] and shall credit the
account with interest annually at the same rate and manner as the
accounts of other members are credited. The compensation paid to
the employee by the reemploying municipality shall be included in
computing the monthly contributions the municipality makes to the
benefit [municipality] accumulation fund.
SECTION 5. Subsections (b) and (d), Section 852.109,
Government Code, are amended to read as follows:
(b) Member contributions under Section 855.402 shall be
made on all compensation paid to the employee by the municipality at
the same rate as is required of other employees of the department.
The retirement system shall credit [deposit] the contributions on
receipt to the member's [in an] individual account [for the member
in the employees saving fund] and shall credit the account with
interest at the same rate and in the same manner as the accounts of
other members are credited. The compensation paid to the employee
by the municipality shall be included in computing the monthly
contributions the municipality makes to the benefit [municipality]
accumulation fund.
(d) The additional service retirement benefit allowable to
a person to whom this section applies is, at the option of that
person, either:
(1) a refund of accumulated contributions made since
reemployment plus any accrued interest on the accumulated
contributions allowed by the retirement system; or
(2) a benefit consisting of:
(A) a basic annuity actuarially determined from
the sum of the member's contributions [deposits] made and
accumulated since the date the person last became a member together
with interest accrued [accumulated] on that amount since the person
last became a member and an amount from the benefit [municipality]
accumulation fund equal to the amount of the member's contributions
[deposits] credited to the member's individual account since the
person last became a member together with interest accrued
[accumulated] on that amount since the person last became a member;
or
(B) a greater amount authorized by the
municipality under Section 855.501.
SECTION 6. Subsection (e), Section 853.003, Government
Code, is amended to read as follows:
(e) A governing body may not adopt an ordinance under
Subsection (a) unless the actuary first determines that all
obligations charged against the municipality's account in the
benefit [municipality] accumulation fund, including the
obligations proposed in the ordinance, can be funded by the
municipality within its maximum contribution rate and within its
amortization period.
SECTION 7. Subsection (c), Section 853.402, Government
Code, is amended to read as follows:
(c) The base updated service credit of a member is an amount
computed as the number 1.03, times the difference by which the
amount computed under Subdivision (1) exceeds the amount computed
under Subdivision (2), where:
(1) "(1)" is an amount equal to the accumulation at
three percent interest of a series of monthly amounts for the number
of months of credited service on the date prescribed by Subsection
(e), each amount of which equals the member's average updated
service compensation, times the sum of:
(A) the rate of contributions required of the
member for current service; plus
(B) the member's contribution rate, times the
municipal current service ratio in effect on the effective date of
the ordinance adopted under Section 853.401; and where
(2) "(2)" is an amount equal to the sum of:
(A) the amount credited to the member's
individual account [in the employees saving fund] on the date
prescribed by Subsection (e), subject to a 1 to 1 matching ratio,
times 2; plus
(B) the amount credited to the member's
individual account, subject to a 1.5 to 1 matching ratio, times 2.5;
plus
(C) the amount credited to the member's
individual account, subject to a 2 to 1 matching ratio, times 3.
SECTION 8. Subsection (a), Section 853.403, Government
Code, is amended to read as follows:
(a) An ordinance adopted under Section 853.401 may not take
effect unless the board of trustees approves the ordinance as
meeting the requirements of this section. The board may not approve
an ordinance unless the actuary first determines, and the board
concurs in the determination, that all obligations charged against
the municipality's account in the benefit [municipality]
accumulation fund, including obligations proposed in the
ordinance, can be funded by the municipality within its maximum
total contribution rate and within its amortization period as in
effect on the date the updated service credits take effect.
SECTION 9. Subsection (d), Section 853.404, Government
Code, is amended to read as follows:
(d) Except as provided by Subsection (e), an ordinance under
this section continues in effect for each year that the actuary
determines that all obligations charged against the municipality's
account in the benefit [municipality] accumulation fund, including
the obligations to become effective the next January 1, can be
funded by the municipality within its maximum contribution rate and
within its amortization period as in effect on the next January 1.
An ordinance under this section will cease to be in effect for
future years if the actuary cannot make that determination, but
shall again take effect for future years beginning January 1 of the
first year after the actuary can make that determination.
SECTION 10. Subsection (c), Section 853.505, Government
Code, is amended to read as follows:
(c) When a person who has military service credit under
Section 853.502 retires and has paid for military service credit
under former law, the retirement system shall compute an amount
equal to the sum of any [transfer to the current service annuity
reserve fund the] accumulated amount paid by the person for the
military service credit under former law, plus [Section 853.504(b)
and] an equal amount multiplied by [from the municipality account
in the municipality accumulation fund equal to the accumulated
amount paid by the person times] the municipality's current service
matching percent in effect on the date the member applied [applies]
for the military service credit [under Section 853.504(b)]. The
retirement system shall use the sum derived from that computation
[amounts] to make annuity payments to the person that are computed
in the same manner as is the person's current service annuity, but
the military service credit and the sum [amounts] may not be used in
other computations, including computations of updated service
credits or prior service credits.
SECTION 11. Subsection (a), Section 853.601, Government
Code, is amended to read as follows:
(a) The governing body of a participating municipality in
ordinances authorizing updated service credits under Section
853.401 on or after January 1, 1984, may provide that those members
who are eligible for such credits on the basis of service with the
granting municipality, who have unforfeited credit for prior
service or current service with another participating municipality
or municipalities by reason of previous employment, and who are
contributing members on the date prescribed by Section 853.402(e),
shall be credited in the retirement system with updated service
credit calculated in the manner prescribed by Sections 853.401 and
853.402, except that in determining the base updated service credit
of the member under Section 853.402(c)(1), all unforfeited credited
service performed by the member by reason of previous employment in
other participating municipalities prior to the date prescribed by
Section 853.402(e) shall be treated as if performed in the service
of the municipality adopting the ordinance, and that amount shall
be reduced by an amount equal to the sum of:
(1) 2 times the amount credited to the member's
individual account [accounts in the employees saving fund] on the
date prescribed in Section 853.402(e), which any participating
municipality has undertaken to match on a 1 to 1 ratio; plus
(2) 2.5 times the amount credited to the member's
individual account [accounts], subject to a 1.5 to 1 matching ratio
by any participating municipality; plus
(3) 3 times the amount credited to the member's
individual account [accounts], subject to a 2 to 1 matching ratio by
any participating municipality; and plus
(4) the sum of all updated service credits, prior
service credits, special prior service credits, and antecedent
service credits allowed to the member by any other participating
municipality by which the member was previously employed and to
which the member is entitled.
SECTION 12. Subsections (c) and (d), Section 854.002,
Government Code, are amended to read as follows:
(c) A current service annuity is actuarially determined on
the date of a member's retirement from the sum of:
(1) the amount credited to the member's individual
account [in the employees saving fund]; and
(2) an additional [the] amount from the benefit
[municipality] accumulation fund equal to the amount in the
member's individual account or a greater amount authorized by a
participating municipality under Section 855.501.
(d) Notwithstanding any other provision of this subtitle,
instead of an annuity, a person will receive from the retirement
system a single payment equal to the sum of the following if on the
date of that person's retirement that sum is $10,000 or less:
(1) any updated service credit or any prior service,
special prior service, or antecedent service credit for that person
on the date of retirement, plus accumulated interest;
(2) the amount credited to the person's individual
account [in the employees saving fund]; and
(3) an additional [the] amount from the benefit
[municipality] accumulation fund equal to the amount in the
member's individual account or a greater amount authorized by a
participating municipality under Section 855.501.
SECTION 13. Subsection (b), Section 854.008, Government
Code, is amended to read as follows:
(b) The amount of a lump-sum distribution under this section
may not exceed three-fourths of the total contributions and
accumulated interest in the member's individual account [in the
employees saving fund] at the time of the member's retirement.
SECTION 14. Subsection (c), Section 854.201, Government
Code, is amended to read as follows:
(c) A governing body may not adopt an ordinance under this
section unless the actuary first determines that all obligations
charged against the municipality's account in the benefit
[municipality] accumulation fund, including the obligations
proposed in the ordinance, can be funded by the municipality within
its maximum contribution rate and within its amortization period.
SECTION 15. Subsection (d), Section 854.202, Government
Code, is amended to read as follows:
(d) An ordinance adopted under this section must also
include the provisions specified in Section 852.105. A governing
body may not adopt an ordinance under this section unless the
actuary first determines, on the basis of mortality and other
tables adopted by the board of trustees, that all obligations of the
municipality to the benefit [municipality] accumulation fund,
including obligations proposed under the ordinance, can be funded
by the municipality within its maximum contribution rate and within
its amortization period.
SECTION 16. Subsections (f) and (g), Section 854.203,
Government Code, are amended to read as follows:
(f) The amount by which an increase under this section
exceeds all previously granted increases to an annuitant is payable
as a prior service annuity, is an obligation of the municipality's
account in the benefit [municipality] accumulation fund, and is
subject to reduction under Section 855.308(f).
(g) An ordinance under this section may not take effect
until it is approved by the board of trustees as meeting the
requirements of this section. The board may not approve an
ordinance unless the actuary first determines that all obligations
charged against the municipality's account in the benefit
[municipality] accumulation fund, including the obligations
proposed in the ordinance, can be funded by the municipality within
its maximum contribution rate and within its amortization period as
in effect on the effective date of the increases.
SECTION 17. Subsections (a) and (c), Section 854.309,
Government Code, are amended to read as follows:
(a) Except as provided by Subsection (b), if a disability
retirement annuity is discontinued under Section 854.307 or the
right to an annuity revoked under Section 854.306(b) [854.306(c)],
the retiree is entitled to a lump-sum payment in an amount, if any,
by which the amount in the retiree's individual account [in the
employees saving fund] at the time of disability retirement exceeds
the amount of current service annuity payments made before the date
the annuity was discontinued or the right to an annuity revoked.
(c) The benefit provided by this section is payable from the
benefit accumulation [current service annuity reserve] fund.
SECTION 18. Subsection (b), Section 854.405, Government
Code, is amended to read as follows:
(b) A governing body may not adopt an ordinance under this
section unless the actuary first determines, on the basis of
mortality and other tables adopted by the board of trustees, that
all obligations of the municipality to the benefit [municipality]
accumulation fund, including obligations proposed under the
ordinance, can be funded by the municipality within its maximum
contribution rate and within its amortization period.
SECTION 19. Subsection (a), Section 854.501, Government
Code, is amended to read as follows:
(a) Except as provided by Subsection (c), if a member dies
before retirement, a lump-sum death benefit is payable from the
benefit accumulation [employees saving] fund in the amount of:
(1) the amount credited to the member's individual
account [in the fund]; plus
(2) interest computed from the beginning of the year
in which death occurs through the end of the month immediately
preceding the month in which death occurs at the rate allowed on
member contributions during the preceding year.
SECTION 20. Section 854.502, Government Code, is amended to
read as follows:
Sec. 854.502. REFUND OF UNRECOVERED CONTRIBUTIONS. (a) If
monthly payments of any standard service retirement annuity under
Section 854.103, optional service retirement annuity under Section
854.104, standard disability retirement annuity under Section
854.304, optional disability retirement annuity under Section
854.305, standard occupational disability retirement annuity under
Section 854.408, or optional occupational disability retirement
annuity under Section 854.410 cease before the sum of all payments
of the annuity equals or exceeds the amount of accumulated
contributions credited to [in] the member's individual account [in
the employees saving fund] at the time of retirement of the member
on whose service the annuity was based, a lump-sum benefit equal to
the amount by which the amount of the accumulated contributions
exceeds the sum of all payments made by reason of the annuity is
payable:
(1) to the designated beneficiary, if living, or if
not living, to the estate of the designated beneficiary, if the
designated beneficiary survived the retiree; or
(2) to the estate of the retiree, if the designated
beneficiary predeceased the retiree.
(b) The benefit provided by this section is payable from the
benefit [current service annuity reserve fund and the municipality]
accumulation fund [in the ratio that the part of the annuity that
was payable from each of those funds bears to the entire benefit
determined on the effective date of retirement].
SECTION 21. Subsection (c), Section 855.305, Government
Code, is amended to read as follows:
(c) All assets of the retirement system shall be credited,
according to the purpose for which they are held, to one of the
following funds:
(1) benefit [employees saving fund;
[(2) municipality] accumulation fund;
[(3) current service annuity reserve fund;]
(2) [(4)] interest fund;
(3) [(5)] endowment fund;
(4) [(6)] expense fund;
(5) [(7)] supplemental disability benefits fund; or
(6) [(8)] supplemental death benefits fund.
SECTION 22. The heading to Section 855.306, Government
Code, is amended to read as follows:
Sec. 855.306. MEMBER'S INDIVIDUAL ACCOUNT [EMPLOYEES
SAVING FUND].
SECTION 23. Section 855.306, Government Code, is amended by
amending Subsection (a) and adding Subsection (d) to read as
follows:
(a) The retirement system shall establish in the
participating municipality's account in the benefit accumulation
fund an individual account for each person who is a member of the
system through employment in that municipality. The retirement
system shall credit to [deposit in] a member's individual account
[in the employees saving fund]:
(1) the amount of contributions to the retirement
system deducted from the member's compensation;
(2) interest allowed on amounts credited to [money in]
the account in accordance with this subtitle; and
(3) the portion of a deposit required by Section
853.003 to reinstate credited service previously canceled that
represents the amount withdrawn.
(d) If a retiree resumes employment under Section 854.308,
the retirement system shall reestablish an individual account for
the member in the participating municipality's account in the
benefit accumulation fund and credit to that account the portion of
the balance of the person's retirement reserve that is attributable
to the person's prior accumulated contributions.
SECTION 24. Section 855.307, Government Code, is amended to
read as follows:
Sec. 855.307. BENEFIT [MUNICIPALITY] ACCUMULATION FUND:
CURRENT SERVICE. (a) The retirement system shall credit or charge
to the account of a participating municipality in the benefit
[municipality] accumulation fund:
(1) all current service contributions made by the
municipality to the retirement system;
(2) net investment income or loss allocated to the
fund under Section 855.317; and
(3) the withdrawal charge for reinstatement of
credited service as provided by Section 853.003.
(b) The retirement system shall pay from the account of a
participating municipality in the benefit [municipality]
accumulation fund:
(1) all payments under annuities arising from current
service credits [money to the current service annuity reserve fund
in accordance with Section 855.318]; and
(2) refunds to certain municipalities in accordance
with Section 855.319.
(c) If credited service previously canceled is reinstated
in accordance with Section 853.003, the retirement system shall
charge the municipality's account in the benefit [municipality]
accumulation fund with the necessary reserves to fund the credits
based on current service that are restored to the member.
(d) The annuities payable as provided by this section are
liabilities and obligations of the participating municipality for
which the service was performed on which the annuities are based and
are payable from the municipality's account in the benefit
accumulation fund.
SECTION 25. The heading to Section 855.308, Government
Code, is amended to read as follows:
Sec. 855.308. BENEFIT [MUNICIPALITY] ACCUMULATION FUND:
PRIOR SERVICE.
SECTION 26. Section 855.308, Government Code, is amended by
amending Subsections (a), (b), (d), and (f) and adding Subsection
(g) to read as follows:
(a) In addition to amounts credited or charged as provided
by Section 855.307, the retirement system shall credit to the
account of a participating municipality in the benefit
[municipality] accumulation fund all prior service contributions
made by the municipality to the retirement system.
(b) In addition to amounts paid as provided by Section
855.307, the retirement system shall pay from the account of a
participating municipality in the benefit [municipality]
accumulation fund:
(1) all payments under annuities arising from prior
service credits, special prior service credits, antecedent service
credits, or updated service credits authorized by a participating
municipality; and
(2) optional increased payments authorized by a
participating municipality under Section 854.203.
(d) If credited service previously canceled is reinstated
in accordance with Section 853.003, the retirement system shall
charge the municipality's account in the benefit [municipality]
accumulation fund with the necessary reserves to fund credits based
on prior service that are restored to the member.
(f) The board of trustees may proportionately reduce all
payments under annuities payable under this section, at any time
and for a period necessary, to prevent those payments for a year
from exceeding the amount available in the participating
municipality's account for prior service.
(g) The annuities payable as provided by this section are
liabilities and obligations of the participating municipality for
which the service was performed, or granted as the result of
reinstated service previously canceled, on which the annuities are
based and are payable from the municipality's account in the
benefit accumulation fund.
SECTION 27. Subsection (e), Section 855.311, Government
Code, is amended to read as follows:
(e) If the board of trustees determines that the amount
credited to the distributive benefits account on December 31 of any
year is sufficient to do so, the board by resolution may:
(1) authorize the distribution and payment of all or
part of the money credited to the account to persons who were
annuitants on that day in the ratio of the rate of the monthly
benefit of each annuitant to the total of all annuity payments made
by the system for the final month of the year; or
(2) authorize the distribution of all or part of the
amount credited to the account to each member's individual account
[in the employees saving fund] as supplemental interest in the
ratio of the amount of interest paid on the individual's account to
the interest paid to all individual accounts for the year.
SECTION 28. Subsection (d), Section 855.313, Government
Code, is amended to read as follows:
(d) [As soon as practicable after December 31, 1988, the
actuary shall calculate the amount of reserves required to pay all
annuities that are obligations of the supplemental disability
benefits fund. If the board of trustees determines, on the basis of
the calculations made by the actuary, that the money to the credit
of the fund is materially in excess of the amount of reserves needed
to assure payment of all annuities that are obligations of the fund,
the board may direct that a portion of the excess shall be
transferred from the supplemental disability benefits fund to the
municipality accumulation fund and credited to the respective
accounts of the participating municipalities in such proportions as
the board of trustees determines to be the ratio of their respective
contributions to the total of all contributions to the supplemental
disability benefits fund.] When all annuities payable from the
supplemental disability benefits fund have been finally paid and
discharged, the board of trustees shall direct that the money
remaining in the supplemental disability benefits fund shall be
transferred and credited to the accounts of the respective
participating municipalities in the benefit [municipality]
accumulation fund in proportion to the same ratios of their
contributions to the total of all contributions to the supplemental
disability benefits fund.
SECTION 29. Section 855.316, Government Code, is amended to
read as follows:
Sec. 855.316. INTEREST RATES AND CREDITING. (a) Unless
this subtitle expressly specifies another rate of interest, for
periods after December 31, 2008, the rate of interest is five
percent compounded annually, plus any other amounts the board of
trustees is expressly authorized to provide. Notwithstanding any
other provision in this chapter, the interest credited to a
member's individual account [the employees saving fund] in a
calendar year may not be less than five percent [as allocated under
Section 855.317(a)].
(b) Effective as of December 31 of each year, the board of
trustees shall credit interest on the accumulated contributions in
a member's individual account as of January 1 of that year in
accordance with Subsection (a) and Section 855.306.
SECTION 30. Subsections (a) and (b), Section 855.317,
Government Code, are amended to read as follows:
(a) Effective as of December 31 of each year, the board of
trustees shall make the following allocations from the interest
fund that in the aggregate equal the net investment income or loss
for the year:
(1) [to the current service annuity reserve fund,
interest on the mean amount in the current service annuity reserve
fund during that year;
[(2)] to the supplemental disability benefits fund,
interest on the mean amount in the supplemental disability benefits
fund during that year;
(2) [(3)] to the supplemental death benefits fund,
interest on the mean amount in the supplemental death benefits fund
during that year;
(3) [(4)] to the accounts in the benefit
[municipality] accumulation fund, an amount derived by applying a
positive or negative rate, as determined by the board of trustees in
its sole discretion to the January 1 balances of that year for each
of those accounts; and
(4) [(5)] to the interest reserve account of the
endowment fund, a positive or negative amount as determined by the
board of trustees in its sole discretion[; and
[(6) to the employees saving fund, interest on the sum
of the accumulated contributions in the employees saving fund
credited on January 1 of that year to all persons who are members on
December 31 of that year before any transfers for retirement
effective December 31 of that year are made].
(b) In making allocations under this section, the board of
trustees shall, without regard to the amount of net investment
income or loss for the calendar year, first allocate interest as
specified in Section 855.316(a) [855.316] to those funds or
accounts referenced in Subsections (a)(1) and[,] (2) of this
section[, (3), and (6)]. The board shall then allocate the
remaining net investment income or loss between the funds or
accounts referenced in Subsections (a)(3) and (4) of this section
[(a)(4) and (5)] in rates or amounts determined by the board in its
sole discretion. The board of trustees shall accumulate the amount
of assets in the interest reserve account of the endowment fund that
the board in its sole discretion determines is necessary:
(1) to provide adequate reserves to:
(A) mitigate the effects of future investment
return volatility and insufficient net investment income; and
(B) provide reasonable rate stabilization for
participating municipalities;
(2) to provide adequate reserves against special and
contingency requirements of other funds of the system; and
(3) to provide the amount required for the
administration expenses of the system for the following year.
SECTION 31. Section 855.319, Government Code, is amended to
read as follows:
Sec. 855.319. PAYMENT TO FORMERLY PARTICIPATING
MUNICIPALITY. If a participating municipality has no employees who
are members of the retirement system and has no present or potential
liabilities resulting from the participation of former employees,
the municipality's participation in the system stops and the system
shall repay to the municipality on application any amount in the
benefit [municipality] accumulation fund that is credited to the
municipality.
SECTION 32. Subsection (g), Section 855.402, Government
Code, is amended to read as follows:
(g) After the deductions for member contributions are paid,
the board of trustees shall:
(1) record all receipts; and
(2) deposit the receipts in the benefit accumulation
fund and credit the appropriate amounts to the members' individual
accounts [credit of the employees saving fund].
SECTION 33. Sections 855.405 and 855.406, Government Code,
are amended to read as follows:
Sec. 855.405. MUNICIPALITY NORMAL CONTRIBUTION. Each
participating municipality shall pay to the benefit [municipality]
accumulation fund, as its normal contribution, an amount equal to a
percentage of the compensation of members employed by the
municipality for that month. The rate of contribution is the normal
contribution rate determined annually by the actuary and approved
by the board of trustees.
Sec. 855.406. MUNICIPALITY PRIOR SERVICE CONTRIBUTION.
(a) Each participating municipality shall pay to the benefit
[municipality] accumulation fund, as its prior service
contribution, an amount equal to a percentage of the compensation
of members employed by the municipality for that month.
(b) The rate of contribution is the rate determined annually
by the actuary and approved by the board of trustees as being the
rate required to fund all obligations charged against the
municipality's account in the benefit [municipality] accumulation
fund within the municipality's amortization period without
resulting in a probable future depletion of that account.
SECTION 34. Subsection (a), Section 855.4065, Government
Code, is amended to read as follows:
(a) In addition to the contributions a participating
municipality is required to make under this subtitle, the board of
trustees, after consultation with the actuary, by rule may
authorize a participating municipality to make lump-sum or periodic
employer contributions to the retirement system to be deposited in
the municipality's account in the benefit [municipality]
accumulation fund.
SECTION 35. Subsections (d), (f), and (g), Section 855.407,
Government Code, are amended to read as follows:
(d) If the dates of participation of each department of a
municipality are not the same, the governing body of the
municipality may request that, to determine the municipality normal
contribution rate and prior service contribution rate and to
determine the period during which the municipality must fund the
obligations charged against its account in the benefit
[municipality] accumulation fund, all of its departments have a
single composite participation date. The actuary shall determine
the composite participation date by computing an average weighted
according to the number of members entering the retirement system
on the actual dates of participation of the departments involved.
(f) The governing body of a municipality that is determined
by the actuary to be unable to finance all obligations charged
against its account in the benefit [municipality] accumulation fund
within 25 years after its most recent actuarial valuation date may
elect to have the municipality contribute to its account in the
benefit [municipality] accumulation fund at a rate that does not
exceed in any year the sum of two percent and the maximum
contribution rate specified by Subsection (a) and by Section
855.501, if applicable, and that the actuary annually may determine
as necessary to finance the existing levels of benefits before the
expiration of 25 years after the most recent actuarial valuation
date.
(g) A municipality that begins participation in the
retirement system on or after December 31, 1999, and any
municipality already participating in the retirement system on that
date whose governing body elects to have the municipality do so
shall contribute to its account in the benefit [municipality]
accumulation fund at the combined rate of total compensation paid
to its employees as the actuary determines is necessary to fund all
obligations chargeable to its account in the fund within the
municipality's amortization period, regardless of other provisions
of this subtitle.
SECTION 36. Subsection (a), Section 855.410, Government
Code, is amended to read as follows:
(a) A participating municipality that fails to remit before
the 16th day of the month all contributions required by this
subchapter to be made and remitted to the retirement system by that
date shall pay to the retirement system, in addition to the
contributions, interest on the past-due amounts at an annual rate
that is the total of the system's investment return assumption
[rates of interest credited by the retirement system to accounts in
the municipality accumulation fund] for the preceding calendar
year, plus two percent. The retirement system shall notify
participating municipalities of the rate of interest that will be
due on late payments.
SECTION 37. Subsection (b), Section 855.501, Government
Code, is amended to read as follows:
(b) The governing body of a municipality electing to provide
for increased reserves by ordinance shall provide that for each
month of current service rendered by a participating employee of
the municipality after the date of its election the municipality
will provide a contribution [as provided by Subsection (c)] equal
to 150 or 200 percent of the member's accumulated contribution to
the retirement system for that month.
SECTION 38. Subsection (c), Section 855.608, Government
Code, is amended to read as follows:
(c) Money for the payment of benefits to a participant under
this section shall be paid to the separate fund created by this
section from the contributions that otherwise would be deposited in
the benefit [municipality] accumulation fund account of the
municipality that employed the member. If the benefit is payable as
a result of service with more than one participating municipality,
there shall be paid from the contributions that otherwise would be
deposited in the benefit [municipality] accumulation fund account
of each affected municipality the amount chargeable to that
municipality for the member. When feasible, the monthly amount to
pay benefits under this section shall be paid not later than the
15th day before the date of a monthly payment to a person receiving
annuity benefits under this section.
SECTION 39. The following provisions of the Government Code
are repealed:
(1) Section 855.309;
(2) Section 855.318; and
(3) Subsections (c) and (d), Section 855.501.
SECTION 40. (a) The Texas Municipal Retirement System
shall:
(1) transfer the assets and liabilities of each
participating municipality's members' individual accounts in the
employees saving fund to the appropriate municipality's accounts in
the benefit accumulation fund and dissolve the employees saving
fund; and
(2) transfer the assets and, if appropriate,
liabilities of the current service annuity reserve fund to the
interest reserve account in the endowment fund and the benefit
accumulation fund, as determined by the board of trustees in
consultation with the actuary, and dissolve the current service
annuity reserve fund.
(b) For purposes of clarification, as of the effective date
of this Act, the municipality accumulation fund is renamed the
benefit accumulation fund, and the Texas Municipal Retirement
System shall transfer the assets and liabilities of the employees
saving fund and the current service annuity reserve fund to the
benefit accumulation fund as described by Subsection (a) of this
section.
(c) In implementing Subtitle G, Title 8, Government Code, as
amended by this Act, including without limitation crediting
interest and conducting the actuarial valuation required by that
subtitle, the Texas Municipal Retirement System shall make all
necessary computations based on an accounting record adjusted to
reflect the transfers of assets and liabilities required by
Subsection (a) of this section as though the transfers had taken
place on December 31, 2010.
SECTION 41. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2011.